Even in the exact addendum it says this right in the beginning...
In exchange for Mr. Thompson's entering into this addendum and surrendering the rights contained in former sections 2 and 3, the Company shall use its best reasonable efforts Lo issue to Mr. Thompson, within 12 months from the cafe of this agreement, 200,000 shares of the Company's preferred stock, Said stock shall have no preference for the payment of dividends, and may be issued without any right to recieve any dividend. The preferred shares will however have super voting rights equivalent to 100 votes of Class A Common shares per share of preferred, such that the total issuance of preferred shares to Mr. Thompson shall have the voting power of 20,000,000 Class A shares.
Now, guess what section 2 and 3 are? I'll paste for you to see the rights he GAVE UP when the company went public...
2. Royalties. The Corporation further agrees that Mr. Thompson shall receive from the Corporation, its licensees, subsidiaries, successors and assigns, royalties on all products employing certain aspects of the Technology, Specifically Corporation grants and guarantees Mr. Thompson the following royalty payments:
a. A 1.65 % royalty on al/ use or gross solos of products that are composed of a protein fiber where one or more protein constituents of the fiber are endogenous to 2ornbyx, and one or more are exogenous to Bombyx, or where two or more proteins which are not found together in silk fibers in nature, are expressed in Bombyx to create a new silk fiber. With the exception that no royalty under this provision shall be owing in the event that said silk fiber is composed entirely of synthetic proteins that do not occur in nature. Said royalty is payable within 60 days of each financial quarter.
b. A 1.65 % royalty on alt use or gross sales of products that are composed of a protein fiber where one or more protein constituents of the fiber are exogenous to Bombyx, and where erre or more of said exogenous protein(s) is not a synthetic protein that is not found in nature, or is not a protein(s) that is found in spiders. Said royalty is payable within 60 days of each financial quarter.
c. A 0.85 % royalty on all use or gross sales of products that are composed of a protein fiber which is produced in or from the silk glands of 8ornbyx, through the use of genetic engineering or DNA manipulation, or RNA manipulation, or induced mutation, or the interdiction of genetic sequences which are foreign to Bombyx. Said royalty is payable within 60 days of each financial quarter.
For purposes of this section it is understood that silk is a protein fiber.
The maximum total royalty due under this Section 2 shall be 1 .75%.
In the event of Mr. Thompson's death, the royalty payments will continue to Mr. Thompson's designee, as he may hereafter appoint. The Company's obligation to pay royalties to Ivir. Thompson or his designee on each of the products shall be in force from the date of this agreement and shall remain in effect on each of the product as described above until the longer of (I) expiration of the last-to-expire patent, held or licensed by the Company on such a product or its method of creation or on the transgenic organism which expresses the product or its protein component(s) or (ii) eighteen years from the date of the first commercial sale of such a product which is covered by this Agreement. In no event shall royalties be owed under this paragraph after twenty seven years from the dale of this agreement.
3. Exclusive license for non protective apparel. The Corporation further agrees that Mr. Thompson shalt receive from the Corporation an exclusive license on all non-protective apparel applications of the company's products and technology. Pursuant to said license, Mr. Thompson will have exclusive rights to sea, make, or have made, non-protective apparel which uses the Company's technology or products worldwide. Non-protective apparel, as used herein, refers to articles of clothing or decoration which are sold primarily to markets and customers who are not purchasing the products primarily for protective purposes. Use of the Company's technology to make shirts, pants, kimonos, undergarments, dresses, business suits, and curtains are all examples of non-protective apparel. Sporting goods and sporting protective apparel are excluded from the definition of non-protective apparel. Shirts with moisture wicking properties sold to runners is for example excluded, but shirts sold with a sports brand logo, but used primarily as an article of casual apparel is included as non-protective apparel within the meaning of this article.
The party's anticipate that Mr. Thompson will assign these rights to a corporation to be formed and referred to herein as "New Company" The Company will receive 24% of the founder's equity in "New Company, and Mr. Thompson will receive 76% of the founder's equity.' "New Company" will be responsible to pay any royalties an its sales that Company would otherwise be obligated to pay. In the event that Mr. Thompson so elects, he may exclude the Company from equity participation in New Company and otherwise retains the rights described in this provision, provided that he will pay the Company a 4% royalty on all of his use or gross sales of the products described in this numbered paragraph 3. Otherwise, Mr. Thompson may elect to relinquish all such rights to the Corporation, in exchange for a 7% royalty on all use or gross sales of the products described in this numbered paragraph 3, or 45% of the net proceeds thereof, whichever is greater.
Kim Thompson GAVE UP those royalty rights in section 2 and 3 when he transferred the technology rights to the company for 200,000 preffered shares. Eventually he changed those to common shares which is why there are only 2 preferred shares left. This is all ancient history that happened back in 2006-2007
AI
